Information technology services firm EOH has narrowed its headline loss a share for the year ended July 31 by 72% year-on-year to 495c.
It reported on December 2 that it had also reduced its gross debt by 20% to R2.6-billion.
Post the financial year-end, it further reduced debt by R410-million.
Meanwhile, revenue for the 2020 financial year decreased to R11.3-billion, but its loss also narrowed to R1.6-billion, from R4.9-billion in the 2019 financial year.
Operating expenses decreased to R3.4-billion from R4.86-billion at the end of July 2019.
It maintained a strong cash balance of R946-million and one-off cash items had decreased to R10-million during the second half of the financial year under review, compared with the R229-million one-off cash items recorded in the first half of the financial year.
EOH CEO Stephan van Coller said the company had made great progress since the start of the organisation's turnaround to becoming a sustainable organisation. The company's near-term focuses include improving its earning before interest, taxes, depreciation and amortisation (Ebitda), disposing of noncore businesses as part of its deleveraging strategy and building a robust governance framework to enable future growth.
The reduction in one-off cash items to R10-million was evidence that the company was getting to the bottom of its issues, he added.
The next phase in the evolution of the company, after a period of consolidation, would be to ensure the quality of its earnings are retained.
The company is well positioned to capitalise on the exponential shifts in the market, and can become a digital transformation enabler in Africa and beyond, Van Coller said.
“We are immensely pleased with the significant progress made by the EOH Group during the financial year. We have managed to position ourselves for growth and largely deal with our legacy issues all while successfully steering the group safely through unprecedented global market conditions.
"While the economic recovery is uncertain, the path is now clearly set for EOH to capitalise on future growth prospects which can be accelerated given the new normal is premised on an enhanced global digital reality.”
Importantly for the long-term future of EOH, the team had completed the first bottom-up, clean sheet strategic review of the company in 22 years and this had generated enormous excitement and contributed to collaboration between teams, said Van Coller.
"Covid-19 had shown us how resilient the business is. We have a broad client base and a broad product base that is not reliant on any single customer, sector or product, although financial services are dominant and the public sector remains a meaningful component (21%) of total revenue. iOCO remains the largest contributor (59%) to total revenue, but contributed 67% of normalised Ebitda.
"iOCO and its end-to-end information and communication technology capabilities provide a robust backbone to grow in the market. iOCO is strategically positioned to grow organically and benefit from the rapid digitalisation brought about by Covid-19. The iOCO teams have also aimed to capitalise on the expertise of the people by developing intellectual property," he said.
Additionally, EOH has focused on reskilling and upskilling its personnel so that it is able to migrate people to where they are needed and the higher skill levels also open up new revenue streams for the group.
"EOH is well positioned to grow in the heightened digital reality and in the midtier enterprise services markets in Africa, Europe and the Middle East to meet the demands for everything as a service. Similarly, its Internet of Things business units, including a Nextec division, and its capabilities in this area position it well to support connected smart, safe and healthy cities and infrastructure.
"EOH is well positioned to benefit from the global digitalisation normal," said Van Coller.